UPS highlighted that B2B buyers in Asia are doing much of their purchasing online but at the same time, they also rely heavily on offline relationships and seeking out solid after-sales service.
KUALA LUMPUR: UPS highlighted that business-to-business (B2B) buyers in Asia are doing much of their purchasing online but at the same time, they also rely heavily on offline relationships and seeking out solid after-sales service.
In its 2019 UPS Industrial Buying Dynamics Asia Pacific Study, it said that there is strong indications that online buying is set to increase, with Asian buyers saying they plan to use this channel more within the next five years.
It noted that where in other regions, shifting demographics have a much bigger role to play in purchasing behavior, to be successful here in Asia, a recommended approach is to consider buyers by job responsibility, rather than nationality or age demographic. As the study shows, Asia is a region of tremendous complexity – one where all buyers are focused on the targeted demands of service for their organisations.
“What we see in Asia is that business relationships are not one dimensional – online channels are popular, but so too are more traditional forms of buying, and this presents a real balancing act for those who want to sell in this region,” said UPS Asia Pacific Region vice president of Marketing Sylvie Van Den Kerkhof.
“The data suggests that businesses wanting to work in Asian markets need to ensure that their e-commerce and bricks-and-mortar operations are both optimised and integrated, while ensuring that post-sales services, such as returns, offer a seamless experience for buyers.”
Notwithstanding the anticipated increase in online purchases amongst Asian buyers, the report also indicates that speaking over the phone or in person happens more frequently in Asia than in the US or Europe.
It said, Asian buyers especially value establishing a relationship in person before purchasing online – this practice is most pronounced in China, where winning trust before doing business is a key part of the deal-making process.
It noted that as a region, Asia is similar to the rest of the world in terms of how much its buyers source from domestic suppliers — 67 per cent of all B2B purchases in Asia come from domestic suppliers, versus 73 per cent in the USand 64 per cent in Europe.
“However, there is one outlier in the region: Japan, where buyers source 90 per cent of all goods domestically. This may change in the near future, however, with the country having recently signed a series of free trade deals—most notably with the EU. When asked what they considered to be the barriers to making international purchases, the top three factors listed by respondents in Asia were longer transit times (60 per cent), customs delays (55 per cent), and issues with returns (45 per cent),” it added.
Globally, it pointed out that post-sales support continued to emerge as an important component of industrial buying, consistent across different categories of buyers and industry segments.
“However, the research found Asian buyers, in particular, value all post-sales services more than buyers do in other regions. These include services such as general returns, pick-up services for difficult-to-ship products, and the provision of ready-made packaging and shipping materials for returns. In China and Japan, the post-sales service that matters most is on-site maintenance and repairs, and in Thailand, returns rank most highly,” it added.
“At UPS, we’ve seen first-hand the important role that post-sales services play in both establishing and strengthening business relationships. While we often think of returns as being a consumer need, their role in B2B relationships is just as, if not more important. A simple and cost-effective returns process means that manufacturers can replace incorrectly sold components back into inventory for re-sale, or a retailer can free up warehouse space for new products by sending back excessive or old stock—both of which can make substantial differences in operating costs for businesses,” added Sahil Jaggi, director of Product and Customer Segment Marketing, UPS Asia Pacific Region.